Markets are focusing on the risk that "foreigners might reduce allocation to US holdings but not assigning as much probability to a scenario that growth will be weak," Mohit Mittal, Pimco's chief investment officer for core strategies, said in a Bloomberg TV interview. Given the US economy is likely to slow longer term, there is value in US bonds at these levels, he added.

The Pimco call indicates some investors may be beginning to see the worst of the rout as over, after a "sell America" trade took markets by storm over the past month and threw the haven status of Treasuries into question. The US bond market is starting to get some relief, with long-maturity yields falling on Wednesday after Trump indicated a willingness to strike a trade deal with China.

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"Treasuries start to look quite attractive in the five to 10-year point," Mittal said. Earlier this month, 10-year yields jumped more than 70 basis points in a matter of days to near 4.6%, after plunging below 4%.

Pimco last week likened the turmoil in US assets to the dynamics of emerging markets, with the $2 trillion bond manager warning that rapid US policy changes are proving challenging.

Recent volatility has "created opportunities to add exposure for patient investors like ourselves," said Mittal. "If you think about it in the next six months to one-year horizon, chances are growth will be lower than what it is today."